World Economic Forum

If the picture in your head of the World Economic Forum’s annual meeting in Davos is one of Great Gatsby-esque parties of caviar, champagne and dancing after midnight then you’d be right – but only at the fringes. There are hundreds of talks, dozens of parties and numerous other events, only a small handful of which are over the top. Most are a pleasant backdrop to one of Davos’s primary pursuits: learning. Learning about trends in other industries, learning about the latest thinking in academia, business and policy and learning from others about how they overcome their biggest challenges.

In a way, Davos is a deeply individual experience, as everyone selects a unique combination of events, leading to a wide array of interactions. What you take away from Davos is equally individual. To me, the learnings from this year’s WEF were primarily about what the world’s most ambitious companies are doing: (more…)

A key message coming out of Davos this year is around the risk which high wealth disparity creates for all of us. I thought it would be interesting to look at a bit of the data which is fueling the discussion, and then some of the likely long term consequences for such disparity.

26 Jan 2015Timothy Nixon

Data:

The first chart below from Oxfam, published just prior to the Davos meeting, shows the share of global wealth owned by the top 1% and bottom 99% over time: (click on image to see close-up)

Currently, roughly 48% of global wealth is owned by 1% of the population, and the top 20% of the population owns roughly 95% of global wealth, leaving 80% of the world with around 5% of the wealth.

And a second graph from Oxfam shows how these trends extend themselves, leading to a point in a couple of years where the wealthiest 1% own more than 50% of global wealth. The report suggests that the main drivers for this trend are highly profitable industries such as the pharmaceutical, financial and insurance sectors, and the effective lobbying by these sectors which shapes tax and regulatory policy. (click on image to see close-up)

According to the World Economic Forum, high wealth disparity creates increasing risks of domestic unrest and mass migration across country borders. It also disadvantages the world’s poor in terms of their ability to be resilient in the face of other risks, like severe weather events brought on by climate change. That in turn, can lead to increased resentment and further negative security consequences for a region impacted by a disaster, and for those perceived as responsible for bringing on the disaster in the first place.

But just looking at the economic argument, there is a growing body of work from the IMF which suggests that economic growth over time is less likely the more inequality increases. Similarly and based on some of the IMF work, S&P recently did a study on the impact of income inequality on growth showing that “a 10% decrease in inequality (a change in the Gini coefficient to 0.37 from 0.40) increases the expected length of a growth spell by 50%.”: (click on image to see close-up)

I think we shouldn’t lose sight of the importance of this message for all of our sakes. Reducing inequality and promoting wealth inclusion are important ingredients in sustainable economic and social development.

Perhaps one of the best parts about being involved in the Thomson Reuters operation here in the heart of Davos at the local library-turned TV studio and news bureau is having the chance to witness great television news being made, practically round the clock.

Every morning during the week of the World Economic Forum annual meeting at 7:30 a.m. CET on the dot, Reuters-run and produced Davos Today promptly begins as watchers online and on TV wake up with the headlines out of Davos and beyond.

What’s been so incredible to witness while here in Davos is the collaboration, professionalism and intensity with which the crew works to make it all happen. Not to mention how genuine, patient and calm and focused the people running the show are. Nothing seems to phase or disturb what they’re doing, which is making live TV happen. (more…)

“You don’t have to choose between doing well and doing good.” – Jim Smith, President and CEO, Thomson Reuters

“It is clear that if the capital markets and the established players don’t innovate, new entrants, including Silicon Valley technology firms, will.” – David Craig, President, Financial & Risk at Thomson Reuters

“We need huge investments of capital in the green economy.” – François Hollande, President of France

“The best answer to the extremists is to build a better world.” – Klaus Schwab, Founder and Executive Chairman, World Economic Forum

“One of the secrets for why Alibaba is successful is because we have a lot [47%] of women.” – Jack Ma, Founder and Executive Chairman, Alibaba Group

It’s only one year since the World Economic Forum launched its Disruptive Innovation in Financial Services work group, but the atmosphere is decidedly different. Last year the collective mood of this cross-industry group was one of denial, largely due to the regulated nature of the financial services industry. This year, a well-known Silicon Valley entrepreneur challenged us to think differently, suggesting we take a clean sheet approach. And the mood couldn’t be more different, as this group embraces the fact that disruptive innovation has arrived.

Many of us in the financial industry developed professionally in a world that was about technology. However, today the curve is absolutely steeper – just think about how Uber and PayPal have changed the nature of their fields. There is also a realization now that technology is but one part: it is really about data and technology. The emerging trend among corporations and banks alike has been to hire chief data officers. We have the term and industry issue “big data” partly to thank for this. However, many of these same firms have still kept their chief information officers; I’m often left wondering about the difference between data and information and how these roles work together.

The emergence of big data as a business issue has changed the industry’s conversations with clients, particularly around opportunities like powerful analytics used to discover trading and investment opportunities or manage risk. But these terms can also be alienating. (more…)

It’s been another successful year for our online communities at the World Economic Forum in Davos – our third in a row – with the Global Markets Forum (GMF), Trading Africa, Trading China and the Japanese-language DealWatch all represented through our series of “LiveChat” real time interviews with key delegates.

From our base in the town’s library, we mulled this year’s big conference themes – crisis and cooperation; growth and stability; innovation and industry and society and security – with the likes of the International Monetary Fund, the United Nations and the World Bank. We talked politics with Serbia’s Prime Minister and the special advisor to the Japanese government, and dissected the European Central Bank’s bumper quantitative easing package with the vice-president of the European Parliament.

In figures: 3 days, 4 forums, 12 guests and 19 chat sessions

Take a look behind the scenes of Davos Today, the official, must-watch TV show of the World Economic Forum. Produced and run exclusively by Reuters, you’ll find a hard working production crew that works tirelessly to put out a great show every morning, as well as produce video clips for Reuters.com and the Reuters Davos Live Blog. Reuters TV anchor Axel Threlfall caught up with the crew to get a sense of what they do and to find out how they’re getting on in the cozy Swiss town.

Davos Today, the official morning show of Thomson Reuters and the World Economic Forum, ran its second show today. In each show, anchor Axel Threlfall interviews world leaders, policymakers, blue-chip CEOs and leading investors. The program provides breaking news and analysis, as well as a flavor of the gossip and ‘behind the scenes’ action taking place in the mountain town.

Friday’s show featured interviews and analysis from the Colombian and Ukrainian finance ministers, the IEA, the Prime Ministers of Serbia and Finland and the CEOs of WPP and Novartis. (more…)

Today marked the second full day of the World Economic Forum annual meeting in Davos, which we kicked off with another great edition of the WEF’s official news program, Davos Today. Today’s show featured interviews from the IMF, the Dutch Prime Minister, Blackstone Group, Nouriel Roubini and the chief economist of Brazil’s biggest bank, Itau.

Special guests and big names

One of the guests who stopped by the Global Markets Forum today was Aleksandar Vučić, Prime Minister of Serbia (pictured above), who took a turn answering questions from the engaged online forum of financial professionals, and in doing so even made the Serbian press.

Big names, of course aren’t all that difficult to come by at an event like Davos, and Reuters journalist Nadia Damouni has now met both Will.i.Am (here representing his foundation), and Yahoo CEO Marissa Mayer. I have a feeling they’ll be more big names popping up as we finish out the week. (more…)